Instacart (NASDAQ:CART) announced Tuesday it plans to lay off about 250 employees, amounting to roughly 7% of its workforce, as part of a restructuring effort. So, what do you need to know about Instacart layoffs?
Well, the grocery delivery company stated its layoffs are mostly targeting middle management, creating a less vertical organizational structure. Additionally, the company hopes to have its teams more concentrated on large-scale projects.
According to the press release, the company’s three executives are all also leaving Instacart for personal reasons. This includes Chief Operating Officer Asha Sharma, Chief Technology Officer Varouj Chitilian, and Chief Architect JJ Zhuang. Instacart has stated it will only backfill the CTO position.
The news comes following Instacart’s relatively solid fourth-quarter earnings call. The San Francisco-based company announced revenue of $803 million in its fiscal fourth quarter, in line with Wall Street estimates of $804 million.
The company also reflected on 2024 as a whole after going public just this past September.
“2023 was a transformational year for Instacart. We expanded our lead in selection and quality while making our service faster and more affordable for consumers. As a result, our service is the best it has ever been,” wrote Chief Executive Fidji Simo. “And we expect a strong start to 2024, with Q1 year-over-year GTV growth anticipated to accelerate for a fourth consecutive quarter.”
Instacart Layoffs Weigh on CART Stock
As you might imagine, investors weren’t thrilled with the layoff announcement. Indeed, CART stock is down 10% today, a steep reversal of the company’s recent momentum.
Instacart stock has mostly enjoyed a strong start to the new year, up about 6%. That said, the stock is down about 25% over the past 12 months.
If you recall, Instacart made headlines back in September as the first major venture-backed tech initial public offering (IPO) since December 2021. The company stated it was focused on integrating artificial intelligence into its platform as a means of growing its grocery delivery business.
Instacart currently delivers in more than 5,000 cities across the U.S. after soaring in popularity during the Covid-19 pandemic.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
